Virtual Economy Research Network

The fourth EVE Fanfest, an event giving the EVE Online players an opportunity to meet each other and the game developers, was held in Reykjavik 1. - 3. November. There were two interesting revelations in the event, which also sparked discussion in panels and roundtables, a part of which I’ll try to summarize here. The first one had to with a soon-to-be-published white paper on the EVE player democracy, and why it actually might not be wise to call it democracy after all. The second was about the soon-to-be-published EVE Online Quarterly Economics Newsletter, Vol.1, No.1.

In addition to these two interesting matters, there’s also the reason why a representative of Helsinki Institute of Information Technology (HIIT) was present at EVE Fanfest this year, namely, a recently formed agreement of research co-operation between HIIT and CCP, the operator of EVE Online.

Robert Bloomfield posted a story at Terra Nova with the rather dramatic heading Financial Market Meltdown in Second Life? It's a description of unfolding events that demonstrate how difficult it is to create security markets in virtual economies. Securities are essentially promises: exchanges of money now for money in the future. Problems arise when someone fails to keep their promise.

In the real economy, there is the legal system that can force you to keep your promises. In Second Life, there isn't. Should there be? Is it just fun and games where you can make commitments and then break them with impunity (except perhaps social consequences, having to get a new avatar)? Or is it a business environment? To what extent does real contract law already apply? These are the issues being debated now.

A couple of weeks ago it was reported (via PlayNoEvil) that China aims to restrict the trading of virtual currencies that have become popular as a payment method even for third-party services. According to the joint announcement of 14 Chinese government agencies including the Ministry of Public Security and People's Bank of China, virtual currencies should not be used to buy real commodities and can only be traded back to real money for amounts not exceeding the original purchase price, eliminating any opportunity for profits.

This is the most severe notice so far in a series of growing government attention to the use of virtual currencies and real-money trade of virtual property in China. At the time of writing, however, RMT markets seem to be operating as usual. For example, Taobao lists thousands of sell offers for Q Coins, the virtual currency of Tencent QQ. I dug a little bit into Chinese language sources to find out more about what's going on.